MYOB CEO Tim Reed talks small business
If you run a business, chances are you’re using at least one MYOB product. We sat down with the software giant’s CEO before Christmas to discuss small business trends for 2013 and to find out what the company can do to make your life easier.
Since launching in 1991, MYOB has become synonymous with business management software. Their products are already used by more than one million businesses across Australia and New Zealand and they are still growing.
Tim Reed joined the company 10 years ago and became CEO in 2007. He explained MYOB’s close relationship with the small business community and shared some helpful advice about how to get ahead in tough times.
How important is small business to the economy?
I’m very passionate about small business, very passionate about the challenges that small businesses face and believe they are often the forgotten party at the table. They contribute so much to the local economy, they are integral to strong communities, they are the businesses that – when the going gets tough – stand by their team members, do the best they can for their clients, frequently put the business second to the needs of team members and the needs of clients and are generally underappreciated for their role in the community.
How does MYOB use its clout to champion the cause of small business?
I think at MYOB I have an opportunity – that we, as a business, have an opportunity – to develop great products that make it easier for them to succeed and to reach their business dreams. To advocate and to lobby on behalf of small businesses and I’ll frequently talk to different government ministers or speak on behalf of small business. We do a lot of research on behalf of small business at MYOB, which we publish and make available to make sure that they’re part of the overall national conversation. I feel like we have a great opportunity to give back to some of the businesses that have given so much to us over the years.
Have you had any personal experience running a small business?
I grew up in a family that lived from small businesses. All my life my dad ran small businesses.
Can you tell us what kind?
He had an educational supplies wholesaling business that he started the year I was born, he then ran a bus and tour company for a period of time, we were in tourism for a number of years – owning and running a holiday resort – and now he runs a bus tour business.
I’m also an investor in a small business – a health services provider, which I did specifically to understand what it is to be a small business owner and to understand the pressures, the trade offs, the red tape requirements that small businesses have to deal with today. Just to make sure that that experience remained relevant to me.
What do you think are the biggest pressures facing small business at the moment?
At MYOB we run one of the largest surveys of small and medium businesses in the country and we ask that question every time.
Right now, it is fuel prices for most businesses. So the most common response over the last 9 or so years has been interest rates but fuel costs and fuel prices are really the top concerns.
This is followed quite closely by cashflow. For every one business that has grown revenue over the past 12 months, two businesses have had revenue contract. When you’re running a business where revenue is getting smaller and smaller, one of the questions on your mind is – am I going to be able to pay the bills next month? Can I meet the payroll? Will I be able to pay the rent? I actually think it’s quite a positive thing that people recognise that cashflow is something they actually need to actively manage in these times.
The third one that is on business owner’s minds is pricing and price margins and profitability. What that tells us is that business owners right now see costs increasing and don’t have the confidence to pass those increases on to their clients. The one note that I would make there is that our qualitative research over time has said that small business owners in particular frequently underestimate their ability to charge for their services. All small business owners should keep that in mind when thinking about their ability to price.
What MYOB products can help business through these hard times?
I’d start with MYOB Atlas, which is a platform that allows a business to build a website in less than 30 minutes. All you have to do is answer questions about your business, you choose layouts and themes, upload pictures and you have a search optimised website that’s out there for the world to see. What our research has shown is that those that do have a website are far more likely to see revenue growing than those that don’t. It’s quite a low cost product and it will really help businesses break through that digital divide and enable them to be online and be found online.
The second one I would mention is MYOB LiveAccounts.It offers a full range of invoicing, expense management, a payroll module – it’s really targeted to the 0 to 5 employee market. Those are the businesses that our research says are finding the conditions really tough right now. Live Accounts allows those businesses to get their bookwork done and in doing so give them a good view as to the financial situation of their business, which will enable them to make better decisions.
What are some tips you could give small business owners to increase their profits?
When times are tough you first want to make sure the foundations of your business are strong. That starts by making sure the existing client relationships you have are healthy. Especially at the end of one year or the start of a new year is a great time to pick up the phone and have a conversation and by doing that you remain top of mind to that person and you’re far more likely to get more business from them going forward.
Make sure you have healthy team relationships. People are motivated and inspired by business owners, who can explain the story of the business and are out there working alongside the team members. That’s what small businesses do much better than large corporations.
The third thing is get online. When we have a look at the differences between what businesses that are performing well are doing and what businesses that are finding it more difficult are doing or are not doing, the biggest single factor is that businesses that are online are far more likely to see their revenue grow and be optimistic about the future. Build a website, set up a Facebook page, set up a LinkedIn account and just learn. You don’t have to be a master the day you start. Just get online and get started. You’ll find it’s a really exciting journey that will lead to better business outcomes.
What’s next for MYOB?
We’re continuing to invest in our cloud-based platforms. Account Right Live is the next generation of our flagship small business product. Most Australian small businesses have an MYOB management system and most of them run a product called MYOB Account Right. It has been in the market for 20 years and is the gold standard for small business accounting and payroll in this country. In November this year we brought out a version that allows a small business owner to run their books in the cloud or on the desktop or both. It allows them to get the full benefit of the cloud. That means they can invite their accountant or bookkeepers in and they can all work on the books at the same time.
Are there any entrepreneurs or small business owners you look up to?
There are so many small business owners I admire but I had the great fortune of being a judge in the Telstra business of the year awards and this year a business called bikeexchange.com.au were the winner of the MYOB small business of the year winner and then the overall winner of the Telstra Business of the year. They are an incredibly inspiring story. They set out with an objective of helping bike retailers get online and start benefitting from the digital ecomony. They’ve done a fantastic job and their business is booming.